The price of XLM has been surging since Stellar’s July 17 announcement of Sharia compliance certification for payments and asset tokenization. This makes Stellar the first DLT (Distributed Ledger Technology) to obtain such certification from the Shariyah Review Bureau (SRB) according to the announcement.
As the entire cryptocurrency market has been recovering over the past week, Stellar has been taking its recovery to the next level, outpacing BTC by over 30% between July 13 and July 19, 2018. On the 13th, XLM was trading at 0.00002974 BTC ($0.186 USD). On July 19th, it is at 0.00003963 BTC ($0.292 USD) per coin. A significant portion of this growth can be attributed to the news of Sharia compliance.
With the approval of the SRB, a top international Sharia advisory agency, licensed by the Central Bank of Bahrain, XLM will have access to markets and Islamic financial institutions where other cryptocurrencies are not accepted.
Stellar is now certified for both money transfer and asset tokenization in the utility of lumens (XLM) as a financial instrument and cryptocurrency platform. In its partnership with the SRB, Stellar may now reach out to all of the financial institutions that comprise the Gulf Cooperation Council, including Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and UAE. This certification also gives them access to parts of Southeast Asia, including Indonesia and Malaysia. As these regions are endpoints for widely used foreign worker remittance corridors, there is the possibility that XLM may be used as a medium of exchange, circumventing cumbersome fiat transactions.
The Stellar Development Foundation already has plans to meet with the GCC members, to discuss ways that lumens may be used to underpin Sharia-compliant financial services and products. The blockchain platform is able to connect banks, payment systems and individuals, in order to electronically move money across borders quickly, easily and cheaply. This deal puts them in direct competition with Ripple (XRP) in targeting financial institutions around the world for adoption.
The Stellar network is open source, and free to use, with extremely inexpensive transactions. It has no commercial restrictions and integration typically takes 120-200 hours of technical development, according to the website. The business model of the foundation is nonprofit, with a goal of providing “low-cost financial services to fight poverty and maximize individual potential.” The foundation has set aside 5% of the initial lumens for operational costs, and has received funding from Stripe, BlackRock, Google.org and FastForward. Of note, this spike in the price of XLM coincides with the news that BlackRock has a blockchain division. While this news may have affected Bitcoin’s price, it’s worthwhile to investigate which other projects BlackRock has invested its capital into, including Stellar.
Stellar has just been booming with news lately. On the 17th, IBM announced that their stablecoin project, developed in partnership with Stronghold, will be built on the Stellar platform. With the news out of BlackRock, IBM’s stablecoin project and the platform’s Sharia compliance, this one may very well be a winner. Note that we are not financial advisors, so be sure to check with a professional before making any significant investments.
The certification may be viewed here.
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